KATHMANDU: The Nepal stock market experienced an unprecedented surge on Sunday, triggering multiple circuit breakers within minutes of the market opening. The initial positive circuit breaker was activated just 1 minute and 31 seconds into trading, followed by a second circuit breaker shortly after trading resumed.
Rapid Market Movements
The market halted for 20 minutes after the first circuit breaker, which occurred due to a significant surge in trading activity. Once trading resumed, the second circuit breaker was triggered almost immediately, leading to an additional 40-minute market halt. By this time, the Nepal stock market had risen by 129.07 points, reaching 2697.21 points.
Understanding Circuit Breakers
Circuit breakers are essential mechanisms designed to prevent drastic impacts on investors due to rapid market fluctuations. In Nepal, these breakers are set to trigger if the market experiences certain percentage changes: a 4% fluctuation within the first hour (11 AM to 12 PM), a 5% fluctuation in the second hour (12 PM to 1 PM), and a 6% fluctuation thereafter. These measures are in place to ensure stability and provide investors with time to make informed decisions.
Investor Confidence and Market Growth
The recent formation of a new government has significantly boosted investor confidence, leading to continuous market growth. The announcement of the latest monetary policy last Friday further fueled enthusiasm among organized investors. The new policy eliminates the existing cap of NPR 200 million on margin loans provided by banks and financial institutions to institutional investors for shares collateralized as securities, while maintaining the individual cap of NPR 150 million.
Positive Economic Indicators
This surge in the stock market is a reflection of the broader economic development and positive market trends in Nepal. The focus on business growth and strategic investment opportunities is attracting more investors to the Nepal stock market. The robust performance of the digital economy and innovative business strategies are also contributing to this upward trajectory.
Looking Ahead
As Nepal continues to navigate the global economic landscape, these developments highlight the country’s potential for sustained economic growth. The proactive approach in implementing favorable economic policies and fostering a dynamic business environment ensures that Nepal remains an attractive destination for global trade and investment. The positive economic forecast, supported by the latest market trends, underscores the growing confidence in Nepal’s economic future.